The financial sector cleanup effort, according to Vice President Dr. Mahamudu Bawumia, was required to prevent Ghana’s banking system from completely collapsing.
In an interaction with Northern Region clergy, Dr. Bawumia revealed that in order to protect the deposits of more than 4.6 million depositors, the government had to make the difficult choice to allocate GH¢25 billion for the revocation of 420 banks’ and specialised deposit-taking institutions’ licences.
He maintained that many jobs were also saved by this one choice.
“The realisation that the banking system might collapse if we didn’t take action to rationalise it and close some of these banks was one of my worst nightmares. In order to restore the banking system, we had to locate GH¢25 billion. By doing so, we were able to save 4.6 million depositors’ funds by simply transferring them to new banks, such as the Consolidated Bank. If not, they would all have failed, and a great number of jobs would have been lost.
He did clarify, though, that depending on the type of business or companies in which they invested their money, some people would still have trouble getting their locked-up cash released.
In the case of specific securities, such as Gold Coast Securities and so forth, these were not bank deposits but rather individual investments, and investors essentially assess the risks associated with particular institutions on their own. We could hear some complaints when they lose money, but occasionally you don’t hear concerns when they gain a lot of money.